Roxy-Pacific Holdings reports 3Q18 net profit nearly tripled despite lower revenue

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Roxy-Pacific Holdings reported on Wednesday that third quarter net profit attributable to equity holders jumped 175 percent on-year to S$4.38 million despite lower revenue amid a higher gross profit margin.

Revenue for the quarter ended 30 September fell 69 percent on-year to S$18.77 million on a lower contribution from the property development and property investment segments, partly offset by higher revenue from the hotel ownership segment, it said in a filing to SGX after the market close on Wednesday.

Property development revenue fell 90 percent on-year in the quarter to S$4.8 million from S$46.5 million in the year-ago quarter, mainly on lower revenue recognition from Trilive, which obtained its TOP in June 2018 and absence of revenue recognition from Jade Residences, Whitehaven and LIV on Wilkie after the projects were completed in 2017, Roxy-Pacific said.

“The decrease was partially offset by higher revenue recognition on construction progress and sales of The Navian and Straits Mansions,” the company said. “Although the group has made good progress in the sales and construction of its projects in Australia, unlike in Singapore and Malaysia, it cannot progressively recognize the revenue as the completed contract method in accounting is adopted for these projects.”

In the property investment segment, revenue fell to S$1.9 million from S$2.9 million in the year-ago quarter on the sale of 59 Goulburn Street in October 2017, partly offset by revenue from the acquisition of NZI Centre in December 2017, it said.

The hotel ownership segment’s revenue rose to S$12.0 million in revenue, up from S$10.9 million in the year-ago quarter, mainly on the October 2017 acquisition of Noku Osaka and higher revenue form Noku Maldives after its full operation in August 2018, Roxy-Pacific said.

The gross profit margin for the quarter was 57 percent, up form 29 percent in the year-ago quarter, it said.

Other operating income jumped 107 percent on-year in the quarter to S$2.04 million, mainly on the partial forfeiture of installments paid by two purchases of units at Liv on Wilkie and Sunnyvale on the repudiation of sale and purchase agreements, it said.

Interest income rose 94 percent on-year to S$464,000 and its realized foreign exchange gain was S$57,000, up from S$8,000 in the year-ago period, it said.

Administrative expenses fell 50 percent on-year in the quarter to S$2.06 million on lower provision for directors’ incentive bonus, Roxy-Pacific said.

Other operating expenses declined 43 percent on-year to S$3.90 million, mainly on year-ago provisions for a S$5.2 million impairment of long-term loans to an associate on higher-than-expected construction costs for a Perth hotel development project and on property, plant and equipment written off in the sale of the 59 Goulburn Street building in the year-ago quarter, it said.

Finance costs fell 24 percent on-year to S$2.44 million, mainly on the repayment of bank loan related to 59 Goulburn Street, which was sold in October 2017, Roxy-Pacific said.


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